The Modi government has given a big gift to the public by reducing GST before festivals. This improvement in GST did not happen overnight, but it started before the council’s meeting in Jaisalmer in December last year. Prime Minister Narendra Modi called Finance Minister Nirmala Sitharaman and asked GST to facilitate businesses and reduce the rate, after which work on it progressed rapidly. Nirmala Sitharaman herself has revealed this.

Sitharaman said in an interview to PTI-language, ‘In fact, the work of extensive reforms in GST had already started. Even before the last GST Council meeting held in Jaisalmer, Rajasthan, the Prime Minister called me and said that once you look at GST, make it convenient for businesses and why there is so many confusion at the rates? I think it was before the Jaisalmer meeting held nine months ago. He said, ‘Then during the budget, when we were discussing income tax measures, he (Prime Minister) reminded me that you are working on GST. This was one thing.

Discussion was being held about GST for a long time

Sitharaman said, ‘Second, the Group of Ministers (GOM) had been working for one and a half years and I appreciate each of them that they worked hard to prepare the report and their suggestions came out, but after listening to the Prime Minister, I decided that now it has come that we should review all aspects of GST, not only the rates, not only the number of slabs, not only the number of slabs, but also to see that there is also a small business, but also that there is also a small business How much better it will be for. ‘

The Finance Minister said, ‘We considered all these things. Saw the classification of goods which was causing a lot of confusion… then, naturally noticed at the rate. From February 1, 2025 to about 15 May, we continued to work for its study review etc.

Meeting PM Modi regarding GST: Finance Minister

Sitharaman said, I went to the Prime Minister in the middle of Tamai, informed him and told that we are close to taking steps. This can take the form of a proposal and requested them to give time. After that he said that you see how can it take it to GST Council.

He said, ‘Then I sat with the team and decided that this would be the proposal of the Center, which will be sent to GOM, because GOM is the ministers of the states. I am not there In fact, we wanted it to be clear that we respect all the works done by GOM. But here a proposal is particularly coming from the Center, which is one-third of the partner in the council.

GST Council’s big decisions

The GST Council last week decided to do two slabs instead of four slabs of GST. Now the tax rates will be 5 and 18 percent, while a special rate of 40 percent will be applicable to harmful items like luxury and cigarettes. Except for cigarette, tobacco and other related items, the new tax rates will be effective from September 22. As part of the rates being random, the rates have been reduced on about 400 items, including consumer products like television and air conditioner, in addition to catering and everyday items.

SBI Research Report on GST: GST 2.0 was announced amidst the ongoing trade tariff tension with the US. It is being said that due to extensive changes in GST rates, tax rates on essential household goods and services will be reduced. In addition, it can help reduce retail inflation from 0.65% to 0.75% in the next financial year. On Thursday, SBI Research said that in the 56th meeting of the GST Council on Wednesday, two tax slabs of 5% and 18% have been approved instead of the current four -level tax rate structure.

What is going to happen?
In addition, a special rate of 40% has been fixed for some luxury and harmful goods and services. The new tax rates will be effective from 22 September except tobacco and related products. The SBI report further stated that out of the 453 items which were changed in GST rates, 413 items were seen to be seen to be seen, while only 40 items were seen to be increased. About 295 items now apply 5 percent or 0 GST rate instead of 12 percent.

Since the GST rate of essential commodities (about 295 items) has come down from 12% to 5% or 0, the consumer price index-based inflation in this category can also be reduced by 0.25 to 0.30 percent in FY 2025-26, keeping in mind the effect of getting 60% of customers on food items.

Why can inflation be reduced?

If you believe in SBI Research Report, then rationalization of GST rates on services will reduce retail inflation on other goods and services from 0.40 to 0.45%. In this, customers have been estimated to get 50% benefits.

According to the report, retail inflation may decrease from 0.65 to 0.75% during the financial year 2026-27. The effective weight average GST rate has come down to 11.6 percent in September 2019, which was 14.4 percent in the beginning, with the GST Council rationalized by the GST Council. According to the report, in view of the current change in rates, the effective weight average GST rate can be reduced to 9.5 percent.

Also read: Will there be no need for loan for loan, know what is the big announcement of the government

GST 2.0: After the announcement of GST 2.0, the government has increased the tax on harmful goods like cigarette, paan masala and tobacco products to 40 percent on the one hand, while there is no effect on alcohol. This decision clearly shows that despite the long -standing negotiations between the Central and the State Governments, the right to tax the liquor will remain with the states.

Rates will increase on harmful things

The government has increased the tax on the products such as cigarettes, gutkha and other tobacco products from 28 percent to 40 percent. That is, an additional burden of 12 percent has been put on these items directly. Its purpose is to reduce the consumption of these harmful things among the people on the one hand, on the other hand the government is also considering it as a big source of revenue.

The FAQ issued by the Press Information Bureau (PIB) states that this special rate will apply only to some goods like harmful and luxury items. In fact, till now these items were also applied with 28 percent GST, but after merging the cess into GST, they have been kept under a special rate.

Big means of earning alcohol for states

At the same time, alcohol is completely excluded from the purview of GST 2.0. Earnings from alcohol for states are a large part of their total tax revenue, which reaches 15 to 25 percent in many states. This is the reason that if liquor was included in GST, then the income of the state governments would have a direct impact. Tax experts believe that the revenue from alcohol is very important for the development work and other expenses of the states.

Therefore, despite the implementation of GST 2.0, liquor rates will remain under the control of the states and the state governments will continue to fix tax on it. This simply means that while tobacco and related products will be expensive, alcohol will not be affected at the moment.

Also read: What do the big business personalities of the country think on GST 2.0? Opinion from Anand Mahindra to Harsh Goenka

A historic decision was taken at the 56th GST Council meeting, under which 12% and 28% tax slab has been abolished. Now only two slabs – 5% and 18% will remain. On this matter, Finance Minister Nirmala Sitharaman said that this change will bring relief for common families, farmers, businesses and health sector. He called it the GST improvement of the next generation and the gift of Diwali for the country.

Congress leader and Rajya Sabha MP P Chidambaram has reacted to the government’s decision. He welcomed it, but also criticized strictly. He wrote on X (East Twitter) that rationalizing GST and decreasing rates on many things and services has been welcome, but this decision has been taken with a delay of 8 years. This existing form and tax slab should not have been implemented from the beginning. We were constantly warning while in opposition, but our arguments were ignored.

The GST Rationalization and the Reduction in Rates on a range of goods and services are welcome but 8 years too late

The current design of gst and the rates previving until today

We have been crying hoorse for the last 8…

– P. chidambaram (@pchidambaram_in) September 3, 2025

P Chidambaram raised questions
Congress leader and Rajya Sabha MP P Chidambaram questioned why this reform was still done. He speculated the political and economic reasons behind this. He questioned whether this decision has been taken under the pressure of sluggish economic development, increasing domestic debt, decreasing savings, upcoming Bihar elections or American tariffs. All these factors can be forced to force the government.
TMC surrounds the government
The All India Trinamool Congress (TMC) also attacked the central government and called this decision a victory for the public. The TMC said that taxing the insurance premium was cruel and anti -people. Mamta Banerjee opposed this from the beginning. However, this decision proves that the BJP government listens only when it is under pressure. The TMC warned that it will continue to fight against every such anti -people decision between Parliament, Road and the public.

Economic and political impact
Cutting in GST rates will provide relief to consumers and reduce the cost of living. The industry will get a chance to increase sales and production. There will also be pressure on the government that further decisions should be taken in time and transparent manner.

Also read: These things will no longer be taxed, all from milk and drugs out of GST, read the full list here

GST couricil meeting: A two -day meeting of the GST Council has started from Wednesday under the chairmanship of Union Finance Minister Nirmala Sitharaman and big announcements can be made on Thursday. It is believed that this meeting will be an important step towards implementing the GST reform announcement made by Prime Minister Narendra Modi from the ramparts of the Red Fort.

The aim of the government is to provide a big relief package to the general public, middle class, small traders and farmers before Diwali through this meeting. That is why it has been called ahead of schedule.

Possible major decisions of GST meeting

1. Two slabs instead of four slabs

Currently, four tax slabs of 5%, 12%, 18% and 28% are applicable in GST. In the meeting, they are being considered to reduce only two slabs (5% and 18%).

2. Everyday things will be cheaper

Electronic items like TV, washing machine, fridge are currently in 28% GST slab. It is proposed to shift them to 18% slab, which will make these products cheap. There are plans to bring them to 5%, which are currently in 12% slabs like ghee, betel nut, water bottle, salty, medicines and medical equipment.

3. Luxury and harmful items will be expensive

However, while the common consumer will get relief on goods, tax can increase on luxury and harmful products. Premium cars and SUVs currently have 28% GST. It is proposed that they should be brought under the scope of tax of up to 40% under the new reform. If seen in this way, the government wants to give relief to the general public on the one hand, on the other hand, it will try to make revenue balance by increasing tax on luxury conference and harmful products.

On the other hand, the finance ministers of the opposition parties ruled the GST Council met each other before the meeting to be held on Wednesday and demanded compensation from the Central Government to compensate the revenue loss due to the proposed change in the GST rates. Finance ministers of Himachal Pradesh, Jharkhand, Karnataka, Kerala, Punjab, Tamil Nadu, Telangana and West Bengal participated in this meeting.

In this meeting held last week, these states discussed that if the slabs of 12% and 28% are removed and two slabs of only 5% and 18% are kept by simplifying the tax structure, then the income of the state governments could have a big impact. In such a situation, necessary steps need to be taken to protect their revenue.

Also read: India Services PMI: Services PMI reached 15 months top in August, Composite PMI also jumped and reached 63.2

GST couricil meeting: The two -day meeting of the GST Council has started from 3 September. This meeting has been called before the scheduled time and important decisions are expected to be taken regarding the GST reform. Right now there are four slabs in the GST system, but the council is considering simplifying this structure.

It is proposed that about 99% of items, which come to the slab of 12% at this time, should be shifted to a slab of 5%. In addition, about 90% of goods, which are currently included in the GST slab of 28%, will be considered bringing them to 18% slab. It is believed that in the meeting, a final decision can be taken keeping in mind the announcement made by Prime Minister Narendra Modi from the ramparts of the Red Fort.

What will be cheaper:

If the GST Council meeting removes the slabs of 12 percent and 28 percent and those items are brought to 5 percent and 18 percent slabs, then the prices of these goods may decrease:

*Stuff in 12% to 5% slab

Processed food products (such as packaged sweets, salty, tomato sauce, papad etc.)

Readimed Garments and Footwear

Domestic use

Furniture, plastic products and electrical accessories

*28% to 18% goods

Domestic electronics (eg TV, fridge, AC, washing machine)

Two-wheelers and cars (mid-segment)

Cosmetic products and perfumes

Paints, Cement and Construction Material

Obviously, consumers will get direct benefit of this in the form of cheap prices and the industry will also get an opportunity to increase sales. This is considered a major step towards promoting domestic industries. If consumption is promoted at the domestic level, then from manufacturing to employment, its direct effect can be seen. This is the reason that America is also taking such steps to save its industries amidst trade tariff tension.

Also read: Moody’s big warning, economy went to the abyss of America, who showed the world ‘Dadagiri’, reached the verge of recession

GST couricil meeting: The two -day meeting of the GST Council is going to be held from Wednesday. The country and the world have a special eye on this meeting being held ahead of time. Because after the announcement of PM Modi of GST Reform, steps will be taken in that direction. In this, ambitious changes in Goods and Services Tax (GST) may be considered to reduce tax on daily use items.

The GST reform will be taken during the meeting of this GST Council under the chairmanship of Union Finance Minister Nirmala Sitharaman. In the proposed reforms, the current 12% and 28% tax slabs are prominent to keep two tax rates of only 5% and 18%. Apart from this, a special rate of 40% will be done on a few selected items.

Why GST Council is important

The tax slab cut and the decrease in prices due to this has been commonly welcomed. But the states ruled by opposition parties are demanding compensation for the loss in revenue due to this change.

Prime Minister Narendra Modi in the Independence Day speech on 15 August told about the plan of GST reforms. Soon after, the Central Government shared a blueprint for the proposed improvement with a group of ministers (GOM) of various states for initial review.

GOM has agreed to the proposal of the center to reduce tax rates. The council will consider these recommendations on 3-4 September.

The news agency PTI quoted sources as saying that the Group of Ministers has supported the imposition of 18% GST on an electric vehicle priced up to Rs 40 lakh, while agreeing hard to the changes in the slabs. However, the central government wants to encourage electric vehicles and is supporting 5% rate for them.

What can be big changes

• Ghee, dry fruits, 20 liters of drinking water, salty, some shoes and costumes, medicines and medical equipment are likely to be reduced from 12% to 5% tax slab.

• Objects like pencils, bicycles, umbrellas and hair pin can also be brought into 5% slab.

• Taxes on electronic goods like TV, washing machine and refrigerator can be reduced from 28% to 18%.

• At present, the highest rate and compensation cess of 28% is applicable to vehicles. 18% rate will be applicable to early level cars. At the same time, a special rate of 40% will be applicable on SUVs and luxury cars.

• A special rate of 40% will also be applicable to the objects like tobacco, paan masala and cigarettes. Additional tax can also be levied on this category on this category.

Opposition states like West Bengal have demanded that any tax imposed above the rate of 40% be shared with the states. So that their revenue deficit can be compensated. Eight states ruled by opposition parties include Himachal Pradesh, Jharkhand, Karnataka, Kerala, Punjab, Tamil Nadu, Telangana and West Bengal.

Share Market Updates: The GST Council meeting starts from 3 September. A day before this, the benchmark equity index was seen on Tuesday. The BSE Sensex rose by 155 points to 80,520, while NSE Nifty was seen trading at 24,653 by climbing 28 points or 0.1 %. Reliance Industries was the most profitable among the shares included in the Sensex. The price of its shares reached Rs 1372 with a bounce of 1.4 percent.

These things will be affected on the stock market

Let us know that in the 56th meeting of the GST Council, the proposals of the government can be approved regarding the genuine reforms. Amid the expectations set up on the GST Council meeting, the meeting of PM Modi, Jinping and Putin in the Shanghai Cooperation Organization (SCO) can also show the effect. Apart from this, the first week of NSE contract under the revised framework will also affect the sentiments of investors. Meanwhile, the expiry date of Sensex options has been transferred on Thursday.

These include top gainers and losquers

Similarly, 0.31 percent in Nifty Midcap 100 and 0.10 percent in Nifty Smallcap 100 recorded a slight lead. The sectoral index recorded the highest growth of 0.82 percent in the Nifty media, while the Nifty Oil and Gas had a 0.34 percent jump. The Nifty FMCG recorded an increase of 0.20 percent.

All other index were seen trading in the red mark. The Nifty IT declined by 0.42 percent. The highest profit earning shares in the Nifty included Eternal and Bajaj Finance, which led to a bounce of 1.1 percent and 0.7 percent respectively. Meanwhile, the most launch shares included Asian Paints, Dr. Reddy’s Labs, Hindalco, Maruti Suzuki and Axis Bank.

Global market condition

Globally these days, investors will be eyeing the CPI data of Eurozone as well as American ISM manufacturing and S&P global manufacturing PMI data. As far as the condition of the Asian markets, Tianjin recorded an edge in the Asian market amidst anticipating the positive results of the Shanghai Cooperation Organization (SCO). Japan’s Nikkei 225 0.31 percent, South Korea’s Cospie 0.45 percent and China’s Shanghai Composite took a lead of 0.04% percent. However, Australia’s S&P/ASX 200 fell to 0.41 percent.

Also read:

Allotment of shares of Vikran Engineering IPO, today may be the status; Learn GMP and Listing Date

Share Market: The week was not special for the Indian stock market. However, the coming week can be special for the Indian stock market. During this time, investors will monitor the GST Council meeting, American tariffs, auto cell data and GST collection data.

All these things will be in focus

The next meeting of the GST Council is scheduled to be held on 3-4 September. With this, the figures of auto cells will also start coming from Monday, which will detect the health of the country’s economy. Excess sales of vehicles are usually considered as a sign of strong economic performance.

The stock market response can also be seen on the first quarter GDP data released on Monday. India’s GDP growth rate was more than expected in the first quarter of 2026 in the first quarter of 2026.

Last week, the stock market is in bad condition

Last week, the Indian stock market closed on the red mark. The Nifty fell at 443.25 points or 1.78 % to close at 24,426.85, while the Sensex fell 1,497.20 points or 1.84 % to close at 79,809.65. During this time, there was a huge decline in midcap and smallcap stocks. The Nifty Midcap fell 100 1,902.35 points or 3.30 percent to close at 55,727.40, while the Nifty Smallcap 100 692.50 points or 3.86 % slipped to close at 17,227.

Many companies reduced market cap

Talking about the sectoral index, PSU Bank -3.46 percent, Financial Services -2.85 percent, Realty -4.28 percent, Energy -2.52 percent, Metal -2.35 percent and PSE -2.84 percent closed down. The PSU index took the only lead, which closed down 0.73 percent.

In the last one week, the Sensex has fallen by 1826 points and Nifty has fallen by 540 points. Due to this, the market cap of 8 companies of the 10 most valuable companies listed in the stock market including Reliance Industries has been damaged. Out of these, RIL has lost Rs 70,707.17 crore.

Also read:

These 8 companies including Mukesh Ambani’s company RIL shock, drowned in a week Rs 2,24,630.45 crore

GST 2.0: The GST Council will meet on 3-4 September, in which the government’s proposals regarding GST reforms will be decided. With this, the people of the country have high expectations. However, there are 8 such states of the opposition in the country, which can keep one of their demands in it.

In fact, these eight states ruled by the opposition parties say that the government’s proposal to restructure the slabs in Goods and Services Tax (GST) will cause a loss of revenue from about 1.5 lakh crore to Rs 2 lakh crore annually to all states. In such a situation, the Center compensation for five years while compensating this loss.

These 8 states say this

Talking to the media on Friday, ministers from Karnataka, Himachal Pradesh, Jharkhand, Kerala, Punjab, Tamil Nadu and Telangana as well as a representative of the West Bengal government have demanded to create a mechanism to avoid profiteering after tax cuts, which can make sure to benefit the common man.

The states have suggested that in addition to 40 percent of luxury and Sin Goods, additional fees should be imposed on luxury and sin goods to maintain revenue from the existing tax slab. A part of the income received from this should be distributed among the states so that they can compensate for the revenue loss. In the next meeting of GST Council, all these states have decided to present their proposal.

Fiscal structure instability due to loss in revenue

The Center has not estimated the revenue loss from rationalization of rates. However, Karnataka Finance Minister Krishna Byre Gowda said that each state is expected to suffer a loss of up to 15-20 percent in its current GST revenue. He also rejected the claim that tax revenue would rise after cuts in rates. Gowda said, “The lack of 20 percent in GST Revenue will severely destabilize the fiscal structure of the state governments across the country.” He further said that states should be compensated for 5 years, which can be carried forward till the revenue is stable.

Punjab Finance Minister Harpal Singh Cheema also has the same demand that a mechanism should be created to find out profiteering so that the benefits of raising rates can reach the common man. These states are also in demand to fix the base year 2024-25 for calculating revenue protection.

Also read:

We will keep buying oil from Russia … ONGC’s big statement came between Trump’s tariff